American Suzuki Declares Chapter 11, To Withdraw From U.S. Market

Well, the writing has been on the wall for years, but now it’s official: Suzuki will stop selling new passenger vehicles in the U.S. The company filed for Chapter 11 bankruptcy protection this evening and will stop selling new cars in the U.S. The company’s marine engine and motorcycle business units will continue as going concerns, and the filing does not impact American Suzuki’s Japan-based parent company, Suzuki Motor Co., Ltd.

Citing poor U.S. auto sales, high costs, regulatory compliance, and an unfavorable exchange rate, Suzuki said in a statement, “While the decision to discontinue new automobile sales in the U.S. was difficult to make, today’s actions were inevitable under these circumstances.”

American Suzuki was just too small to make any kind of a dent in the U.S. auto market. It Kizashi near-midsize sedan was a bit small, but was a very nice entrant in a very competitive, crowded segment. When Full Metal Autos reviewed a Kizashi, we came away impressed by the car.  [Possibly not as impressed as Road & Track seemed to be with it.] Yet Kizashi sales often did not reach four figures per month (sometimes were only in the 250-unit neighborhood). Plus, even with the Kizashi, there just were not enough dealers (just 220 according to the bankruptcy filing, vs. 246 at the beginning of the year). That limitation kept sales low and scared away potential customers who were afraid of what would happen if they needed warranty work and the nearest dealer was an hour or two away.

Then there was the lineup. It consisted of the Kizashi, the SX4 (sedan and wagon), the aging Grand Vitara compact SUV, and the Equator, which is a rebadged Nissan Frontier pickup. Nothing popular, no stand-out products, and also nothing with excellent fuel economy. That Suzuki can offer some of the most desirable motorcycles in the world while offering the opposite in terms of its U.S. auto lineup was not lost on many people.

Suzuki’s dwindling fortunes (and its dwindling dealer body) inspired me to snap the accompanying photo of a Suzuki dealership on July 29, 2012, just because it’s so rare to see them. (An average of about four per state, although there are 16 dealerships within 100 miles of Full Metal Autos headquarters in the Philadelphia area.) Much closer to home, one town over, there’s a shuttered Suzuki store in which the signage has long since been removed, but the SUZUKI text is still plainly visible on the exterior wall.

Unlike Toyota, which dates to the 1950s in America, American Suzuki’s history stretches back only 27 years, to 1985. In that year, Suzuki launched the Samurai mini off-roader on these shores. It sold vey well initially, until Consumer Reports killed it. Suzuki filed suit in 1996, and a settlement wasn’t reached until 2004. The damage was done: Suzuki never recovered from the Samurai rollover debacle.

Suzuki also built the Chevy Sprint for General Motors (which was a rebadged JDM Suzuki Cultus); the Geo Metro replaced the Sprint at Chevy dealerships and Suzuki began selling its version of the car as the Swift in the U.S. Suzuki also built the Geo Metro for GM, and sold its own version of the same vehicle with the Suzuki Sidekick badge.

Suzuki and GM jointly purchased the assets of bankrupt Korean automaker Daewoo, and formed GMDAT. Suzuki subsequently sold several rebadged Daewoos as Suzukis in North America. American Suzuki managed to move over 100,000 cars in 2006; the recession was to kind to Suzuki, though. Year to date, total sales were just 21,288.

So pour one out for the quirky little shoestring-budget Japanese automaker. Now, lets see what happens with Mitsubishi in the coming years. It’s healthier, but not healthy.